Survey: Mid-size companies see health care costs rise as much as 10%

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Regionally, Virginia and North Carolina employers see increases

The 2013 Mid-Market Benefits Benchmarking Survey conducted by Scott Benefit Services has found that nationally, 72% of mid-sized employers say that health care costs increased anywhere from 1% to as much as 10% over the previous year due to the Affordable Care Act.

Regional results indicate that 72% of participating employers in Virginia, as well as 80% of participating employers in North Carolina, are also forecasting a price impact from ACA. Although the majority of employers participating in the survey responded that health care costs are increasing 3% or more due to ACA, only one-quarter of Virginia companies have completed a formal analysis to assess the impact.

The survey also revealed other significant changes to the health care field in response to ACA including plan design change, consumer-driven health plans and wellness programs.

With health care costs continuing to grow, the survey trend shows that participating employers will manage the rising expense through decreasing the value of their benefit plan design change and increasing employee payroll contribution. In Virginia, for instance, 70% of mid-size company respondents are considering plan design changes, while 42% say they will charge dependent tiers more in contribution amounts.

Passing costs along is answer for many

“Employers continue to look for ways to offset continued high levels of medical inflation coupled with increased costs due to ACA taxes and fees,” noted Josh McGee, vice president of health risk performance for Lynchburg, Va.-based Scott Insurance. “The simplest solution for employers continues to be to share and pass those increasing costs on to their employees in the form of reduced benefits plan values and increased payroll deduction.”

Consumer-driven health plans have entered the market and continue to take on a larger role as companies develop plans to meet the minimum value standard. By 2008, 15% of employers nationally offered a CDHP. In 2012, this number climbed to 23%. Regionally, Virginia and North Carolina rank high in the nation compared to other states in CDHP participation: In Virginia, 34% of participating employers are currently offering CDHPs and 23% are looking into offering a CDHP in the future; in North Carolina, 32% of participating employers currently offer CDHPs, and 20% consider offering them in the future.

In the area of wellness, survey data illustrates that employer wellness programs are becoming increasingly popular as ACA creates new incentives to encourage employers to offer opportunities supporting healthier workplaces. In Virginia, more than 50% of participating employers offer some type of wellness program. The most popular offerings include Employee Assistance Programs, wellness newsletters and smoking cessation programs.

Although ACA is a big driver for wellness programs, many employers are creating wellness opportunities to help their workforce. In Virginia, for instance, 68% of employers offer wellness programs to improve the health of their employees as well as to improve employee morale and productivity.

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Pages linking to this article:

  • The Minority Report Blog | Conservative News & Opinion

    […] Insurance and Financial Advisor News reports, “The 2013 Mid-Market Benefits Benchmarking Survey conducted by Scott Benefit Services has found that nationally, 72% of mid-sized employers say that health care costs increased anywhere from 1% to as much as 10% over the previous year due to the Affordable Care Act. Regional results indicate that 72% of participating employers in Virginia, as well as 80% of participating employers in North Carolina, are also forecasting a price impact from ACA. Although the majority of employers participating in the survey responded that health care costs are increasing 3% or more due to ACA, only one-quarter of Virginia companies have completed a formal analysis to assess the impact. The survey also revealed other significant changes to the health care field in response to ACA including plan design change, consumer-driven health plans and wellness programs.” […]

  • ObamaCare Headlines Week in Review: Obama’s (Un)Affordable Care Act | US Senators

    […] Insurance and Financial Advisor: Survey: Mid-size companies see health care cost rise as much as 10% […]

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